New Delhi, Nov 12 -- After building the $8.5 million Gold Souk in Gurgaon and several such speciality malls in other cities, Aeren R. Enterprises is constructing a $85 million 'festival city' in Punjab.

A leading real estate company in India, Aeren R.'s festival city will have a mix of specialty malls, a multiplex, an Imax theatre, food courts and entertainment zones spread over two million sq. ft. on the Grand Trunk road on the National Highway 1.

"It will be the ultimate destination mall in Punjab with India's biggest indoor entertainment park and a six screen multiplex," Rajesh J. Aeren, vice chairman of Aeren R. Enterprises, told IANS in an interview.

"We chose Punjab as it is a prosperous state in India with an average compounded growth of 10 percent per annum. Since Ludhiana is among the top cities of Punjab, we thought it was the best choice," Aeren added.

Today, 40 per cent of the malls are concentrated in the smaller cities where the organised retailing is growing at a 50-60 percent compared to 35-40 percent in large cities, says a study by the India Brand Equity Fund (IBEF).

Aeren R.'s project has been designed by the Britain's RTKL Associates, one of the world's top architectural firms, company officials said.

"Such a project has not been conceptualised in India so it had to be awarded to an experienced architect who has had the expertise of designing such malls in Europe, America, Japan, China, Malaysia," Aeren added.

Company officials said more than 70 percent of the retail space for the Ludhiana project has already leased out to renowned brands like Shopper's Stop, Reebok, Pantaloon, Levis Strauss and Adidas.

"The mall will be ready and operational by the first quarter of 2008 and it will be a worthy competitor for the best facilities in the world," Aeren said, adding that the construction for the project had already commenced.

Aeren R. is also seeking to invite Indians living in the US to invest in India's booming real estate industry for which it is taking a team of senior management officials on an exploratory visit to some US cities.

"The main purpose of the visit is to interact with the local non-resident Indian community and apprise them about the exciting opportunities available in India in the real estate development sector," Aeren added.

India is currently the ninth largest retail market in the world, says Technopak Advisors, a realty consulting and research agency. Organised retailing in India will cross the $ 21.5 billion mark by 2010 from $7.5 billion now, it says.